RNS Number:9353A
Thorntons PLC
10 September 2002
IMMEDIATE RELEASE 10 September 2002
Announcement of Preliminary Results for
52 weeks ended 29 June 2002 (audited)
Continued progress
Thorntons PLC, the speciality retailer and manufacturer of high quality
chocolate, toffee and other sweet foods, today reports preliminary results for
the 52 weeks ended 29 June 2002.
Highlights
2001/2 2000/1
52 weeks 53 weeks
#m
Turnover 163.8 159.9 up2.4%
Operating profit 10.4 10.1 up3.0%
Profit before tax 7.1 6.1 up16.4%
Operating cash inflow 23.9 22.8 up4.8%
Basic earnings per share 11.19p 6.84p up63.6%
Earnings per share at standard 30% tax 7.58p 6.45p up17.5%
Dividend per share 6.80p 6.80p No change
Net debt (37.2) (44.5) Reduced 16.4%
Gearing 86.5% 111.0% Reduced 22.1%
* Own shop like-for-like sales up 3.6%, the first full year increase in
three years.
* Gross and net margins strengthened.
* Profit before tax increased by 16.4%.
* Earnings per share, benefiting from a tax rebate, up 63.6%. At
standard tax rates, earnings per share up 17.5% to 7.58p.
* Gearing down, dividend cover improved and interest cover lifted to 3.2
times.
* Considerable progress made towards corporate vision of being the UK's
leading retailer and distributor of sweet special food with Thorntons Pure
Indulgence products now on sale in every major supermarket.
* Updated strategic agenda for growth which builds on current brand
strength.
* Own shop like-for-like sales in first 9 weeks of the current financial
year +6.8%, 18 consecutive positive weeks over the Summer.
* Philip Douty is to be appointed to the PLC board as Trading Director
with effect from 30th September. Recently M.D. of Boots Wellbeing Services,
Philip, aged 40, spent 8 years in total at Boots after roles within Grand
Metropolitan and Colgate-Palmolive.
Commenting Peter Burdon, Chief Executive, said:
"Two years ago we promised that we would restore the company to a healthy
earnings growth rate, to be delivered over a three year period. We are firmly on
track with that plan, with the final year of the turnaround having started
strongly.
We have set in motion a number of growth initiatives, that are already starting
to deliver but require further work, time and some investment to realise their
full potential. Whilst these initiatives form the backbone of our refreshed
strategic agenda, it is also undoubtedly true that we have other attractive
product and distribution opportunities to maximise the potential of the
Thorntons brand."
For further information, please contact:
Peter Burdon - Chief Executive, Thorntons PLC 01773 540550
Martin Allen - Finance Director, Thorntons PLC 01773 540550
Charles Ryland / Catherine Miles - Buchanan Communications 020 7466 5000
Chairman's statement
Dear shareholder,
Last year when I reported to you, I outlined that the company had been
stabilised and we were confident of delivering improved shareholder value. I am
delighted that the results and progress, detailed below, confirm that our
confidence was justified.
The UK economy and the world in general, have become more uncertain in the last
twelve months making the focus on our own performance of even greater
importance. Our goal must be to deliver improving profit and to turn this into
cash whilst at the same time set in place the foundations for good long term
growth. We are increasingly confident that this is now the case.
The Chief Executive's business overview sets out the significant progress we are
now making.
Results
Headline profit before tax was up 16.4% to #7.1million.
Underlying profit before tax, excluding one-off items, rose by 26.8% to #7.1m,
on sales growth of 2.4% reflecting close attention to margin and costs.
Furthermore, it is especially pleasing to report that our own shop like-for-like
sales were up +3.6%, the first full year increase in three years.
Cash continues to be very positive with operating inflow of #23.9m, up 4.8%
compared to last year.
Gearing, now incorporating full provisions for deferred tax, has reduced from
111.0% to 86.5%. We have repaid the first $13m of capital due on the $65m US
loans, borrowed in 1998 to finance the factory development. Despite this, we
again finished the year with no UK bank borrowings, indeed we had #3.5m on
deposit.
We continue to benefit from capital allowances derived from the high capital
spend in the late 1990's and as a result of substantial prior year rebates
received in the second half, there was a small net tax credit in the year.
The overall impact of the improvements set out above, has led to basic earnings
per share rising to 11.19 pence. However, using a standard tax rate, earnings
per share is 7.58 pence, an increase of 17.5% over the comparable figure for
last year. This improvement has fully justified your Board's decision to leave
the dividend rate unchanged.
Your Board is again recommending that the final dividend remains unchanged at
4.85 pence per share, resulting in a full year dividend of 6.80 pence per share,
also unchanged.
People
As we outlined in last year's annual report, we have operated the last year with
Peter Burdon as the acting Trading Director, given the importance of this
function in changing the fortunes of the business. We are now at a stage in our
development where the positive momentum in the business has allowed us to fill
the post on a full time basis, allowing Peter to concentrate on other strategic
issues crucial to our future growth. Therefore, we are pleased to welcome
Philip Douty as our new Trading Director from 30 September. Recently Managing
Director of Boots Wellbeing Services, Philip spent eight years in total at
Boots, after roles within Grand Metropolitan and Colgate-Palmolive.
In July we announced that Peter Baldwin, Supply Chain Director, had been asked
to leave the business to be replaced by Jon Pollard. Peter, who joined us in
1996, played the leading role in the Thornton Park development particularly the
commissioning of the packing factory and warehousing and distribution centre
opened in 1998. We would like to thank him for his contribution during his time
with us and wish him well for the future.
Jon Pollard joined Thorntons in 1986 and has worked in all areas of
manufacturing and distribution. We wish Jon well in his new role where, in
particular, we are looking to him to drive forward innovation and the benefits
open to us from being both a manufacturer and a retailer.
On the same date we announced that Peggy Czyzak-Dannenbaum was retiring from her
position as a non-executive Director after eight years of service. She has been
replaced by Alice Avis, who brings a breadth of experience from a number of
companies including Diageo and Flutter.com. I would like to thank Peggy for her
wise counsel and welcome Alice to the Board.
Corporate governance and risk management
Given all the issues raised in the financial world over the last year, and the
general concern over company stewardship, I would like to briefly outline our
approach. As a Board we take our corporate and social responsibilities seriously
and continue to seek active and open reviews of our actions to ensure we are
'good citizens' for all our stakeholders.
The company continues to monitor its policies to reduce risk and to meet the
need for corporate and financial diligence including setting clear
responsibilities and cross-checking through both internal and external review.
From a shareholder point of view, we aim to be open and informative. This
includes institutional shareholder presentations by Peter Burdon and Martin
Allen and increasing amounts of information displayed on our corporate web-site
(www.thorntons.co.uk), where questions can be posed and answered.
Environment and the community
As a company we directly supported charitable and community initiatives to the
value of #33,000. We are also active in ensuring we are as environmentally
friendly as possible with many successful initiatives being part of our everyday
working practices. These initiatives range from recycling of packaging to energy
and fuel usage and from general site conservation to responsible cocoa sourcing.
Outlook
Two years ago we promised that we would restore the company to a healthy
earnings growth rate. We are firmly on track with that plan having stabilised
the business and set in motion a number of growth initiatives that are already
starting to deliver. These initiatives form the backbone of our refreshed
strategic agenda, which is detailed in the Chief Executive's business overview.
I am confident that the team now in place can deliver continued growth and
returns to our shareholders, and we look forward to updating you again in early
2003.
I would like to pay special thanks to all my colleagues who have worked for
Thorntons, in any capacity, over the last twelve months. The progress we are
making is as a result of their hard and well co-ordinated work, and I am proud
of their efforts.
Chief Executive's business overview
Last year I reported that the first stage of our three year plan, stabilisation
of the business, had been completed. The next stage was to create organic growth
from our existing assets and move us towards our vision of being 'the UK's
leading retailer and distributor of sweet special food'. The strategic agenda
we set out last year for this stage of the plan has begun to deliver, as the
latest set of results amply demonstrate. We have now reflected on the results
from five initiatives we previously set out and created a refreshed agenda for
the coming year.
Before explaining the revisions in detail I would like to update you on the
progress made to date:
Signature stores
This initiative arose from the need to resolve the key strategic issue facing
the company: disapointing like-for-like sales in our own stores. The intent was
to create a totally new customer proposition, comprising a new store
environment, a refreshed range of product and a more active style of service.
The new concept was developed over summer 2001 and was implemented in nine
stores from September, with eight of them operating over the key Christmas
season. In line with our company investment appraisal policy, our objective was
to create an increase in sales in the trial stores, which created a quick
payback on the investment.
At our review of the trial in April we concluded that, whilst the new concept
had increased sales, it had not met our tough investment criterion of a two year
payback. As a full rollout of the concept could have cost up to #20m over a
number of years, we decided not to proceed but to distil the best features of
the trial stores and roll these out at low cost over the coming year.
These features included bolder and more contemporary graphics consistent with
our brand values, as well as a warmer palette of colours for the store fabric
and point of sale material. We have refined these further and are now rolling
them out to the stores, at relatively low cost.
To create a more active style of service, more attuned to our customers' needs,
we are investing more in training and tightened up our retail management
processes. These enhancements to our service have already started to roll out
and the impact on our trading has been significant with much still to come.
One of the key pieces of learning from the trial was that, whilst we trimmed the
existing range and introduced a number of new products unique to the nine
stores, we did not go far enough. Therefore, as you will see in the refreshed
strategic agenda later, we will be putting even greater emphasis on product and
packaging innovation in the future.
Product range optimisation
As we reported in February, this project, to reduce our product range by between
10 and 20%, has been completed. We continue to monitor progress and recognise
that we still have opportunities to reduce the range further. We know from
trials and feedback that our customers really do find that their shopping
experience is better by having clearer product choices. In addition, deletion
of lower volume products clearly improves our manufacturing efficiencies.
Cafe Thorntons
The twenty-five combined cafe/chocolate shop sites produced total annual sales
of almost #17m. This format makes good financial sense as we have a cafe
business which produces a good return on a fully allocated cost basis.
Nevertheless, we have identified many opportunities to improve the current
operation further as well as develop a new concept to enable us to at least
double the number of cafes over two to three years.
To provide greater focus on the cafe operation, which has its own '
idiosyncrasies' in comparison to a pure confectionery shop, we have split out
the management of the cafes from the rest of the estate and strengthened the
senior team. This is already impacting their performance, as well as enabling us
to start the development of a new concept still with a provincial town focus.
This will be differentiated from the main cafe brands with a unique combination
of food, drink, service and environment, which appeals to a broad customer
segment whose needs are not fully satisfied by the current offerings.
Licensed products
This initiative has already proved that our vision to become 'the UK's leading
retailer and distributor of sweet special food' can be delivered. We have
developed, through our various licensing partners, an excellent range of sweet
special foods, under the 'Thorntons Pure Indulgence' brand name, including
cakes, trifles, cheesecakes, puddings and biscuits. These are already on sale
in the stores of the leading grocery multiples. New products under development
include ice cream, sauces and a liqueur.
Our income is in the form of royalties as we neither manufacture nor distribute.
This is carried out by our partners, all specialists in their field, although we
are closely involved in the development and quality of the final product. The
total income from 'Thorntons Pure Indulgence' was #189,000 in the financial year
despite only launching this venture in September 2001, an excellent beginning on
which we look to build for the future.
Impulse product distribution
In March 2002 we began an exclusive twelve month contract with Tesco to sell a
range of six chocolate bars through their 700 stores, again under the 'Thorntons
Pure Indulgence' brand name. Both Tesco and ourselves have been very pleased at
the way this venture has developed enabling a wider availability of this type of
'impulse purchase' product, without any detrimental impact on our own retail and
franchise estate. We look forward to adding other similar products to the third
party range, already sold in our own shops, for sale in Tesco and other
retailers once the twelve month exclusivity period is successfully completed.
Future growth plans
That completes the review of the strategic agenda we set out last year. Our
plan for the next twelve months is to ensure that we build on the successful
platform we have put in place and that we are not distracted by chasing too many
new opportunities. The last year has taught us that there is significant organic
growth still available to us and our strategic and organisational development
should have this as its focus. Therefore, consistent with what many of you have
told us, we do not currently intend to initiate the third phase of the original
three year plan: to seek out new sources of growth. Instead, the review of new
growth opportunities will be conducted as lower key strategic initiative in the
agenda. This does not rule them out merely postpones their implementation.
The refreshed strategic agenda, which will move us further along the road to our
vision, has six initiatives.
Brand development and communication
All successful consumer companies have great clarity on their brands and what
they stand for. One of the insights from the Signature Stores initiative was
that we needed to create greater clarity on the essence of our brand and its
values. This is so that we can ensure that every element of our offer, be it the
product packaging or the style of our shop colleague's uniforms to the point of
sale material, has a consistent theme within it.
This work is already underway and starting to impact the other initiatives. In
time, it will touch every element of the company's work and culture, allowing us
to more efficiently and effectively move towards our vision.
Retail support process
I make no apologies for putting an internal organisational initiative as a key
strategic priority. The improvement in like-for-like sales in own stores and
franchised locations has not arrived by accident, nor merely through
improvements to the product range alone.
Over the last two years, we have improved a number of internal processes and
systems which have produced good results, particularly the management of stocks
to avoid overhangs at the key seasons whilst assuring we do not run the risk of
missing sales through stock shortages in stores. However, a recent review of
the systems supporting our own stores, identified that store managers were still
spending an excessive amount of time on cumbersome administrative processes, not
enough time on selling to customers and coaching their colleagues. We realised
there was a golden opportunity to unlock this time and so further enhance
like-for-like sales by, for example, redesigning the weekly stock ordering
process and the planning of colleague hours.
This insight coincided with the recent implementation of a new Retail management
structure which reduced the number of shops under each Area Business Manager's
responsibility, from 30 to 20 stores, as well as placing the cafes and the
Birthdays joint venture stores under separate management structures. This
initiative will seek to leverage the greater resource provided by the change in
structure as well as better utilising the store managers and their colleagues'
time.
Product & packaging innovation
Thorntons brand is well known and respected for indulgent, special products but
we need to improve the development of our products and their packaging to
provide continued delight to purchaser and consumer. This requires us to do two
things. First, invest some of our continuing cost savings from across the
company in product and packaging development. To this end, we will be raising
our annual investment in innovation by over 50% in the coming year to almost
#2m. Second, we must streamline the development process so that we can get good
ideas faster to market in an efficient manner. This work will be conducted over
the next twelve months although the investment will take longer to bear fruit.
Third party distribution
We are new entrants into this arena but in less than twelve months we have made
major strides. We have a long standing and successful 'own brand' relationship
with Marks & Spencer, which we intend to build upon. However, we have now
developed the wider distribution of Thorntons branded product through additional
channels working in partnership with others and we look to expand into further
outlets in time.
For this new business to be successful, we have to ensure we properly and
professionally manage these new relationships and fully understand the different
requirements needed from product development through to product distribution.
This again will demand that we adapt our internal structure and processes to
meet the exacting requirements of our new partners and also look for the best
ways that we can develop the business in the short and medium term.
This continued review will need to be implemented quickly and we will need to
ensure that we have the longer-term targets clearly set out. We are already well
underway with this process.
Cafe Thorntons
This initiative carries over from the last year. The challenge is twofold.
First, to secure a greater return from our existing twenty-five cafes. Second,
to develop a new cafe concept, whose successful trial will enable us to achieve
our ambition of doubling the number of cafes over the next two to three years.
New sources of growth
As I highlighted earlier, the initiatives above and good day-to-day management
of the company are more than capable of producing very good earnings growth.
However, to enhance shareholder value in the longer term, we need to seek out
new opportunities to leverage the Company's vision.
Summary and outlook
We are confident that we have set in train a series of actions capable of
generating good earnings growth immediately and significant enhancement of
shareholder value in the medium term. Our task in the next twelve months is to
ensure that the initiatives above are delivered in a sound manner with clearly
evident positive results, which meet or exceed our expectations. We will not
neglect longer-term opportunities but evaluate them in a careful and considered
manner, and implement those with the best risk/return payoff when the time is
appropriate.
Finally, I am pleased to update you on current trading. In the first nine weeks
of the new financial year we have continued the very positive trading pattern
with own shop like-for-like sales above last year in every week and by +6.8% in
total. However, it is likely that the like-for-like challenge will become
greater in the rest of the year, with the key seasons yet to come.
Finance Director's review
Summary
In our report last year we set out two key priorities for improving overall
financial performance which were from like-for-like sales in our own shops and
cash flow. Successful delivery of these priorities, as set out below, has
enabled every other key financial measure to improve.
Underlying profit before tax is up by 26.8% to #7.1m, a rise over 2 years of
almost 60%. After inclusion of one off property related costs and benefits the
rise is 16.4% in the year. Gross profit as a percent of sales rose from 52.0%
last year to 53.4% through manufacturing efficiency and product range changes.
Operating cash flow rose by 4.8% to #23.9m; over 3 times the profit level, which
reflects high depreciation of capital assets being carried by the business.
Gearing has fallen from 111.0% (restated) to 86.5% as net debt fell by #7.3m to
#37.2m.
Earnings per share is up 63.6%, as a result of the improved profit levels but
also the continuing low net tax rate. Gross interest cover is now over three
times.
Sales
Total company sales rose by 2.4% to #163.8m. There was one less trading week in
the year compared to the previous year and stripping out this impact the
underlying increase was +3.7%. All the percentages below are on a 52 week
comparable basis.
A key part of our strategy has been to drive additional sales through our
existing own stores at higher margin and this is being delivered .The
like-for-like sales improvement of +3.6% over the full year is the first real
improvement since 1997/98, and reflects growth within and outside the key
seasons. We will also continue to trim the lower performing stores and last year
we reduced by 5 shops to 395.
Our attention to own shop performance remains a key priority as they produce
82.1% of our total sales. However, this percentage did fall by 1% over the last
12 months as we continued to expand into other distribution channels.
We continue to add to our franchised estate, these being shared shops in
secondary shopping locations. The 18 new sites helped drive sales up by 22.6% to
#11.3m.
Whilst commercial sales fell by a net 8.5% this was expected given our decision
to exit the supply of some lower margin, non-Thorntons branded products. We now
expect this area of the business to grow, driven by new agreements to supply a
limited range of impulse products into supermarkets, initially Tesco.
Development of our profitable Gift Delivery Service (mail order and e-commerce
operation) continues well with sales up 89.4 % to #4.2m. We continue to improve
the net margin and to enhance customer service so that we expect the
contribution from this channel business to expand rapidly.
Royalty income, from the sweet special food range sold under licence, was #0.2m,
over 70% of which was in the second half year as product launches progressed.
There was no such income in the previous year and is recorded under ' other
operating income' in the consolidated profit and loss account.
Margin
As a vertically integrated manufacturer and retailer we can improve margin both
through more efficient manufacturing processes and the sales mix. We continue to
see room to improve both.
Total gross profit rose from 52.0% to 53.4% in the year. Given the mix of sales
channels, with varying product prices, we are also seeking to improve the return
on sales after charging all selling and distribution costs, including items such
as advertising, rents and other shop running costs. In the last year this margin
has risen from 13.1% to 14.0%, equivalent to #1.5m profit improvement.
Costs
We continue to pay close attention to our cost base in the face of ongoing
pressures.
Over the past year events, largely outside our control, mean certain very
specific costs will inevitably rise. Insurance costs will increase by at least
#0.6m, and the increase in National Insurance Contributions imposed in the
Chancellor's budget will add #0.5m to our annual wage bill. The general stock
market decline has increased our total final salary pension scheme deficit to
#12.8 m and we will be increasing contributions in the coming financial year by
#0.3m - the defined benefit scheme has now been closed to new employees.
In addition, we are reaching a peak for rent reviews following the expansion of
the shop estate in the late 1990's. Well in excess of 100 shops are due for
review, but we are confident that pressure on the rents will not be as intensive
as experienced in recent years and we will ensure our strict return on
investment criteria remain in place during these reviews.
Despite the above, we are confident that our growth prospects and ongoing strict
cost management will enable us to invest additional sums in those areas of the
business vital for future growth including new product development, training,
information systems and increased incentives for success.
Profits and tax
Underlying profit before tax rose by #1.5m to #7.1m. In the year gains from the
release of provisions for future lease liabilities of #0.4m were offset by
losses on disposals of assets, including property, to the same value. Last year
there was a net gain of #0.5m. As a result headline profit, also #7.1m, was up
+16.4%.
The underlying rate of tax rose from 32% to 37%, as a result of reduced capital
allowances and an increased level of expenses not deductible for tax. However a
#2.8m cash repayment in respect of prior years, when capital spend was
significantly higher, reduced the net rate to 8% (2001: 24%) before deferred tax
adjustments.
Prior year results have been restated to fully incorporate the impact of
implementing Financial Reporting Standard 19 requiring a full provision for
deferred tax. The balance sheet now carries a provision of #8.3m.
Dividends and shareholder returns
The combination of the growth in profit and , in particular, the net tax credit,
has lifted (basic) earnings per share by 63.6% to 11.19 pence per share. On a
fully diluted basis the rise was marginally less to 11.09 pence per share and at
a standard rate of tax is up 17.5% at 7.58 pence. Our confidence in being able
to deliver the new strategy led to the recommendation last year to hold the
dividend at 6.80 pence per ordinary share. With the recovery in earnings we are
again proposing to leave the full year dividend unchanged at 6.80 pence per
share, resulting in a final dividend of 4.85 pence per share to be paid on 29
November 2002 to shareholders on the register at the close of business on 1
November 2002.
On a restated basis net assets per share rose from 60.2 pence to 64.6 pence.
In the twelve months to 30 June, our share price rose by 23.6% versus a decline
in the market indices. This capital return plus the higher than average
dividend yield means that we are now achieving our objective of securing good
returns for our shareholders.
Cash
Operating cash inflow rose to #23.9m from #22.8m in the prior year. A slightly
earlier seasonal stock build, to smooth production peaks, and the changing
business patterns has lead to an increase in working capital of #2.7m, which was
offset in cash terms by the tax rebate.
Net capital expenditure was #1.2m higher than last year but additions to fixed
assets were only 40% of depreciation levels reflecting our continued aim to
reduce borrowings. In the year, we repaid the first of 5 annual instalments
relating to the $65m US loan notes. Despite this, total cash on deposit in the
UK as at 29 June was #3.5m against #3.3m last year. As a direct result of the
strong cash flow interest costs fell by #0.8m.
Net debt was #37.2m, which compares to #52.3m in June 2000. After restatement
for deferred tax, gearing over that two year period has also reduced from 130.4%
to 86.5%.
Outlook
Our focus remains the generation of shareholder value through solid growth in
earnings and careful cash management.
The profit growth will be delivered by continuing to grow own shop like for like
sales whilst also attracting additional customers through the new channels to
market, being developed in a relatively low cost manner.
Whilst general cost pressure is undoubtedly increasing we are confident that the
initiatives in place, particularly margin improvement plans, will continue to
improve the financial ratios and results.
Consolidated profit and loss account
for 52 weeks ended 29 June 2002
For 52 weeks For 53 weeks ended
ended 29 June 30 June 2001
2002 (restated)
#'000 #'000
Turnover 163,800 159,921
Cost of sales (76,327) (76,722)
Gross profit 87,473 83,199
Other selling and distribution costs (64,548) (62,297)
Net release of onerous lease provisions 443 584
Selling and distribution costs (64,105) (61,713)
Administrative expenses (13,378) (11,500)
Other operating income 420 162
Operating profit 10,410 10,148
Interest receivable and similar income 422 369
Interest payable and similar charges (3,718) (4,432)
Profit on ordinary activities before taxation 7,114 6,085
Taxation 238 (1,570)
Profit on ordinary activities after taxation 7,352 4,515
Dividends (4,435) (4,490)
Retained profit for the period 2,917 25
Basic earnings per ordinary share (pence) 11.19 6.84
Fully diluted earnings per ordinary share (pence) 11.09 6.83
Dividend per ordinary share (pence) 6.80 6.80
Continuing operations
All amounts above relate solely to continuing operations.
Historical cost results
There was no material difference between the result disclosed above and the
result on an unmodified historical cost basis.
Restatement of comparatives
The adoption of FRS19 'Deferred tax' has resulted in changes to prior period
reported results.
Consolidated statement of total recognised gains and losses
For 52 weeks For 53 weeks
ended 29 June ended 30 June
2002 2001
#'000 #'000
Total recognised gains and losses for the period 7,352 4,515
Prior period adjustment - FRS19 (9,130) -
Total recognised gains and losses since last (1,778) 4,515
annual report
Group balance sheets
As at As at
29 June 2002 30 June 2001
#'000 (restated)
#'000
Fixed assets
Tangible assets 87,444 96,457
Investments in own shares 1,452 290
88,896 96,747
Current assets
Stocks 14,073 13,220
Debtors 10,743 9,024
Cash at bank and in hand 3,520 3,275
28,336 25,519
Creditors: amounts falling due within one (35,409) (34,242)
year
Net current liabilities (7,073) (8,723)
Total assets less current liabilities 81,823 88,024
Creditors: amounts falling due after one (30,208) (38,047)
year
Provisions for liabilities and charges (8,600) (9,880)
Net assets 43,015 40,097
Capital and reserves
Share capital 6,656 6,656
Share premium 12,400 12,399
Revaluation reserves 485 505
Profit and loss account 23,474 20,537
Equity shareholders' funds 43,015 40,097
These financial statements were approved by the Board of Directors on 9
September 2002 and were signed on its behalf by:
C J Thornton M C Allen
Chairman Finance Director
Movements in shareholders' funds
for 52 weeks ended 29 June 2002
2002 2001
#'000 (restated)
#'000
Profit after tax attributable to shareholders 7,352 4,515
Dividends (4,435) (4,490)
Retained profit attributable to shareholders 2,917 25
New share capital issued 1 -
Net increase in shareholders' funds 2,918 25
Opening shareholders' funds - as originally reported 49,227 49,097
Prior period adjustment - FRS19 (9,130) (9,025)
Opening shareholders' funds - as restated 40,097 40,072
Closing shareholders' funds 43,015 40,097
Consolidated cash flow statement
for 52 weeks ended 29 June 2002
2002 2001
#'000 #'000
Cash inflow from operating activities 21,160 21,117
Returns on investments and servicing of finance (3,489) (4,155)
Taxation 507 902
Capital expenditure and financial investment (2,754) (1,587)
Equity dividends paid (4,486) (4,492)
Cash inflow before use of liquid resources and financing 10,938 11,785
Management of liquid resources (2,292) 264
Financing - issue of shares 1 -
- decrease in debt (10,752) (10,716)
(Decrease)/increase in cash in the period (2,105) 1,333
Reconciliation of net cash flow to movement in net debt
for 52 weeks ended 29 June 2002
2002 2001
#'000 #'000
(Decrease)/increase in cash in the period (2,105) 1,333
Cash outflow from decrease in debt 10,752 10,716
Cash outflow/(inflow) from increase/(decrease) in liquid 2,292 (264)
resources
Change in net debt resulting from cash flows 10,939 11,785
Inception of new finance leases (3,675) (4,168)
Translation difference 58 141
Movement in net debt in the period 7,322 7,758
Net debt at beginning of period (44,515) (52,273)
Net debt at end of period (37,193) (44,515)
Notes to the financial statements
1 Other operating income
2002 2001
#'000 #'000
Rents receivable 109 106
Licensing royalties 189 -
Other amounts receivable 122 56
Other operating income 420 162
2 Operating profit
2002 2001
#'000 #'000
Operating profit is stated after charging:
Depreciation of owned tangible fixed assets 10,270 10,914
Depreciation of tangible fixed assets held 3,103 2,203
under finance lease
Amortisation of investments in own shares 113 -
Operating lease rentals - land and buildings 18,035 17,901
- other 758 638
Rents payable in relation to shop turnover 415 385
Auditors' remuneration - parent company 58 60
- other 2 2
Corporation tax fees paid to auditors 87 134
Other non audit remuneration paid to 58 43
auditors
Loss on disposal of fixed assets 405 73
3 Net release of onerous lease provisions
2002 2001
#'000 #'000
Asset created for new onerous lease sublet receivables 6 11
Provision released on exit from onerous leases 437 573
Net release of onerous lease provisions 443 584
There were no new onerous lease obligations incurred during the period (2001:
#nil). Additional sublet receivables on existing onerous lease properties gave
rise to a credit of #6,000 (2001: credit of #11,000) whilst #437,000 (2001:
#573,000) was released on exiting onerous lease obligations on three properties
(2001: two properties).
4 Interest receivable and similar income
2002 2001
#'000 #'000
Interest on bank deposits 126 59
Interest on tax repayments 235 168
Exchange differences and other interest receivable 61 142
Interest receivable and similar income 422 369
5 Interest payable and similar charges
2002 2001
#'000 #'000
Bank loan and overdraft interest 260 768
Unsecured loan note interest payable at fixed 7.35% 2,758 2,956
Unsecured loan note interest payable on additional premium 91 122
Exchange differences and other interest 30 13
Interest on finance lease repayments 579 573
Interest payable and similar charges 3,718 4,432
6 Taxation
2002 2001
(restated)
#'000 #'000
UK corporation tax at 30% (2001 : 30%) 2,605 1,909
Adjustments in respect of previous periods (2,043) (449)
Overseas taxation 4 5
Current taxation 566 1,465
Deferred tax (804) 105
Total Taxation (238) 1,570
The tax assessed for the period is lower than the standard rate of corporation
tax in the UK (30%). The differences are explained below:
2002 2001
#'000 #'000
Profit on ordinary activities before tax 7,114 6,085
Multiplied by standard rate of corporation tax in the UK (30%) 2,134 1,825
Effects of:
Adjustments in respect of previous periods (2,043) (449)
Non-taxable income (90) (67)
Expenses not deductible for tax purposes 455 359
Depreciation in excess of capital allowances 347 (133)
Non-taxable profits on sale of fixed assets (79) (104)
Other timing differences (158) 34
Actual tax on profit on ordinary activities 566 1,465
7 Dividends
2002 2001
Dividend per Dividend per 2002 2001
share share #'000 #'000
10 pence ordinary shares:
Interim Paid 1.95p 1.95p 1,282 1,285
Final Proposed 4.85p 4.85p 3,153 3,205
Total Dividends 6.80p 6.80p 4,435 4,490
The trusts operating the LTIP and 2001 Executive Share Option Scheme have waived
all but a nominal sum as dividends on the 1,541,808 (2001 : 504,610) shares in
their possession at the year-end. As such no dividend has been accrued for these
shareholdings although additional amounts have been provided in anticipation of
the conversion of share options.
If approved, the final dividend will be paid on 29 November 2002 to shareholders
on the register at the close of business on 1 November 2002.
8 Earnings per share
The calculations of earnings per share are based on the following
profits after taxation:-
2002 2002 2001 2001
2002 Basic Fully 2001 Basic Fully
Results earnings diluted Results earnings diluted
#'000 per share earnings (restated) per share earnings per
per share #'000 (restated) share
(restated)
Profit before onerous leases credit 7,042 10.72p 10.62p 4,106 6.22p 6.21p
Onerous leases credit 310 0.47p 0.47p 409 0.62p 0.62p
Profit on ordinary activities 7,352 11.19p 11.09p 4,515 6.84p 6.83p
Weighted average number of shares:
2002 2001
Number of Number of
Ordinary Shares Ordinary Shares
Basic weighted average number of ordinary shares 65,721,596 66,056,697
Dilutive effect from share options* 551,284 89,701
Fully diluted weighted average number of ordinary 66,272,880 66,146,398
shares
* Average market price of the Group's shares during #1.0130 #0.8675
the period
9 Reconciliation of operating profit to operating cash flows
2002 2001
#'000 #'000
Operating profit 10,410 10,148
Loss on disposal of fixed assets 405 73
Depreciation charges 13,373 13,117
Amortisation charges 113 -
Non-cash movements in provisions (443) (584)
Operating cash flows before working capital movements 23,858 22,754
Cash flows relating to previous years provisions (33) (107)
(Increase)/decrease in stocks (853) 3,781
Increase in debtors (1,674) (1,413)
Decrease in creditors (138) (3,898)
Net cash inflow from operating activities 21,160 21,117
10 Analysis of net debt
At Other At
30 June Cash non-cash Exchange 29 June
2001 flow changes movement 2002
#'000 #'000 #'000 #'000 #'000
Group : For the 52 weeks ended 29 June 2002
Cash at bank and in hand 3,275 (2,105) - 58 1,228
Debt due within one year (7,915) 7,915 (7,915) - (7,915)
Debt due after one year (31,659) - 7,915 - (23,744)
Finance leases (8,216) 2,837 (3,675) - (9,054)
(47,790) 10,752 (3,675) - (40,713)
Cash on deposit - 2,292 - - 2,292
Total Net Debt (44,515) 10,939 (3,675) 58 (37,193)
At Other At
24 June Cash non-cash Exchange 30 June
2000 flow changes movement 2001
#'000 #'000 #'000 #'000 #'000
Group : For the 53 weeks ended 30 June 2001
Cash at bank and in hand 1,801 1,333 - 141 3,275
Debt due within one year (8,350) 8,350 (7,915) - (7,915)
Debt due after one year (39,574) - 7,915 - (31,659)
Finance leases (6,414) 2,366 (4,168) - (8,216)
(54,338) 10,716 (4,168) - (47,790)
Cash on deposit 264 (264) - - -
Total Net Debt (52,273) 11,785 (4,168) 141 (44,515)
Major non-cash transactions
During the period the Group entered into finance lease agreements in respect of
various fittings, plant and equipment with capital values at the inception of
the leases of #3,675,000 (2001: #4,168,000).
11 Annual Report 2002
The financial information above does not constitute the Group's
financial statements. Financial statements for the 52 weeks ended 29 June 2002
and the 53 weeks ended 30 June 2001 have been reported on without qualification
by PricewaterhouseCoopers, the Group's independent auditors. Financial
statements for the 53 weeks ended 30 June 2001 have been delivered to the
Registrar of Companies and the financial statements for the 52 weeks ended 29
June 2002 will be delivered in due course.
The Annual Report 2002 will be posted to shareholders in the first
week of October 2002. Copies for general release will be available from the
Company Secretary, Thorntons PLC, Thornton Park, Somercotes, Alfreton,
Derbyshire, DE55 4XJ from 8 October 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLGDCRBGGGDC
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Thorntons Plc (LSE:THT)
Historical Stock Chart
From Jul 2023 to Jul 2024
